Family-Owned Business’s Performance

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Table 4.9 Performance Summary of FOB according to generations and time segments.

FOB (Industrial

Type)

Business’s age (year)

Business’s Performance Founder’s

business activities

Current generation business activities

Business Competitiveness Case-1

Weaving Factory

36 (1^st -2^nd

gen:)

 Established in 1980

 Produced own logo

 Changed into wholesale distributor in late 2000

 2^nd son couple joined in 2008

 Used technology, weaving machine

 Cooperated with creative ideas

 Created own textile design

 Improve business capabilities

 Integrated with technology and creative thinking

Case-2 Weaving factory and distribution

center

58 (2^nd gen:)

 Started in 1958

 Operated with traditional ways

 Involved with loyal employees

 Managed the business by discipline

 3^rd son joined in 2008

 Changed business management system

 Imported raw material from India

 Extended one more branch

 Developed business management

 Upgraded resources

 Technology usage Case-4

Green-tea and fried

pea production

37 (1^st -2^nd

gen:)

 Founded in 1979

 Upgraded the product type in 1989

 Distributed to the whole country

 2^nd son spouse joined in 2006

 Used machines and upgraded the product types

 Contracted with

supermarkets and extend markets over the country

 Upgraded products’ quality

 Enlarge the business network

 Technology usage

Case-5 TM milk production

33 (1^st -2^nd

gen:)

 Established in 1983

 Produced milk distributed within one day

 Tried to penetrate Yangon market

 3^rd and 4^th son joined in 2013

 Upgraded the readymade product

 Give 2 days’ warranty

 Contracted with Supermarkets

 Upgraded the product level

 Extended the market

Case-6 Gold and

Jewelry shop

25 (1^st -2^nd

gen:)

 Established in 1991

 Managed by traditional ways

 Extend 1 new branch in 2011

 Created the seasoning strategies

 Eldest son joined in 2011

 Managed employees with flexible rules

 Opened 1 more branch

 Managed systematically

 Extend the business network

Case-8 Wheat Wholesale

Center

40 (2^nd gen:)

 Established in 1976

 Business is operated by trust and honesty

 All the children operate business in 2000

 Think of both sides (customers and business)

 Extend 2 more branches

 Keep customers’

trust

 Extend the market network Case-9 33  Established in 1983

 Mother led the business in 2008

 2^nd daughter joined in 2011  Polished business tasks

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Gold and Jewelry

(1^st -2^nd gen:)

 Keep the products quality  Combined the traditional concept with creative thinking

 Created the appropriate strategy depending on customers

 Create the strategy

Case-10 Rice Factory

50 (1^st -2^nd

gen:)

 Established in 1966

 Operated by traditional ways

 Applied the strategies by adjusting time, place and products’ quality

 Youngest daughter managed in 2005

 Used new machines and tools for upgrading the quality

 Planned the financial part

 Upgraded the product quality with technology

 Used assets

Case-11 Snack (plum) Production

40 (1^st -2^nd

gen:)

 Business is built in 1977

 Managed with traditional ways

 Produced many kinds of products in a readymade form

 2^nd son spouse joined in 2005

 Designed new product and penetrated Yangon market

 Opened 2 more branches

 Improve business’s capabilities

 Extended business’s network Case-12

Watch Distribution

and Wholesale

center

52 (1^st -2^nd

gen:)

 Established in 1964

 Operated by traditional ways

 Extended two more branches

 Upgraded to the wholesales center

 2^nd daughter joined in 1994

 Created the strategy to compete in the market

 Extend one more branch

 Create the business own trend

 Stronger business capabilities

 Enlarge the business network

 Compete in the market

1^st Generation Stage of FOB FOB

(Industrial Type)

Business’s age (year)

Business’s Performance

Early Business activities Current Business activities Competitive advantages Case-3

Weaving factory and

sale center

12

 Established in 2004

 Started with 30 machines

 Distributed to the wholesale center

 Late 2008, produce their own logo

 Used technological aids (e.g., CCTV,

advertisement)

 Improve business capabilities

 Run

systematically Case-7

Private Education

Center 14

 Established in 2002

 Operated business by planning

 Set duties and responsibilities

 No profits in the first 4 years

 Gained benefits after 5 years

 Collaborate and

acknowledge others’ efforts

 Operated systematically

 Well-known in the education sector

 Stable and stronger business capabilities Case-13

Wood Crafting wholesale

center

21

 Established in 1995

 Managed by husband

 Set schedule and disciplines

 Set duties and responsibilities

 Extended consultant service in 2005

 advertisements and attracted tourists

 Enlarge the regional trading system

 Improve business capabilities

 Compete in the market

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As shown in Table 4.9, the businesses’ competitiveness (i.e., capabilities and performance) are significantly improved over generations and timeline segments. This research noticed that the involvement of the family members makes better businesses’ capabilities nowadays than in the previous decades. This can be attributed to the capabilities of the next generation family members;

education, knowledge and creative thinking. This study found that the improved performance can be identified with non-KPIs according to the two viewpoints below:

(1) Business Capacity (i.e., creative strategies and upgrade products’ quality) (2) Business’s Influence Network (i.e., extend products/service in the market)

Due to combining two generations (i.e., founder and second generation), the current business capacity and network are significantly improved in resources or capabilities or strategies. For example, the production process is upgraded by computerization/mechanization, the products’

quality are improved, extend the market’s network and compete with others. This study noticed that such kind of business advantages persuade this generation stage and couldn’t suggest the next generation (e.g., 3^rd generation).

The usual business life cycle, the first 20 years is to stabilize in the market, after 30 years is the growing stage. Such businesses have sufficiency of knowledge, experience and skills to handle the business, competitiveness and urgent problems. The longtime familiarity of the new members makes them keen to move to the next steps for improvement. The founders’ background support is the cornerstone of those next steps. It has been found that such kind of effective activities are associated with the family’s appreciation of values (e.g., satisfaction or happiness or well-knowing) and socio-economic goals that are shaped by the family’s attitude. Through various background resources, performance varies. This study found that different family's capabilities help the performance. Another finding is that the capabilities of business with female leaders (as mothers) perform less than those with male leaders (as fathers).

In addition, three FOBs are currently in the first generation stage and their performance activities are identified on the timeline. This research found that the FOBs’ early years were struggling for unity using experience and knowledge. In this technology and knowledge age, the FOB reinforced with machines and tools to keep the business. It is clear that current Myanmar FOBs are in the growing stages of the business life-cycle and need to maintain their capabilities and family resources.

4.3.1 Technology usage

Observation showed that all FOBs of families prefer to use technology in the business process (e.g., CCTV, production machines and packing tools), even in rural area firms, they used technology. All business members accepted that technology can help to improve activities, example quotes of some businesses are shown below.

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For many reasons, we use CCTV in the weaving factory for security and to monitor the employees. That provides a good business process. (Case-3)

In the gold and jewelry shop, we mostly emphasized security and safeguard.

Technology helped us to smooth the business process and services day and night.

(Case-9).

Technology has no boundaries, even in rural areas, here we can use the latest machines in the rice factory, a computerized machine to clean rice well. This makes products of great quality. (Case-11)

4.3.2 Relationship among Core-Categories

To observe the formation of familiness, the study focused on the family’s background and nature for observing the FOBs. Drawing from the literature, our primary assumption is that the family itself possesses its own resources which are implicitly embedded in people, customs and institution. All this helps generate the business (Habbershon and William, 1999; Dyer, 2003). From the RBV perspective, we categorized the fundamental resources into five core-categories over three dimensions; individual, family and business as described in the previous sections. This study found that the five core-categories are relying on and reinforcing each other within both the family and business units. Relations of resources core-categories are described in figure 4.6 as follows.

Figure 4.6 Relationship of familial resources, familiness and business performance

The role of family involvement (i.e., tangible and intangible) is critical in business due to un-measurable effects. However, if a family is seen as an institution, the basic system appears as the framework with a governance system and leadership patterns. This system and pattern may form the internal mechanism and functions, such as individuals’ attitude and social interaction. The

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fundamental categories represent the family dimension and assist developing the individual dimension. For individuals, each member’s engagement and unity is the basic resource feature for essential capabilities and performance of business. Without having adequate individuals’ resources, the family mechanism and business process couldn’t perform well. The family customs and institution influence over members mandates the orientation. Inside this orientation, people of interaction, cognitive ties and social matters are the integral parts governed by the family leadership system. From the business aspect, the family attitude provides the ways of operating the business, and if this attitudes is not proper, the business might not survive. Based on those relations, this study found the five categories correlated. Even though, the study used the terms categories, but actually the features (emotional, cognitive and physical) are inseparable in the real sense.

During the whole mechanism, familiness may influence in shaping of business strategy and performance aligned with their family strength, such as financial, knowledge, creative thinking.

Figure 4.6 represents the relationship of family resource, familiness, business strategy and its performance by depicting with five core-resources. This figure partially illustrates the resource relations and its mechanism at FOBs.

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